Pension reform postponed, again… Martinelli loses in court, again… First Quantum seeks allies, again… Trump tries to influence Panama, again.
Two tasks were pending for December 2024: (1) the Government's Economic Program (PEG), which we will analyze in detail in early January once it is officially published. It will form the basis for our projections for the next five years; and (2) the CSS reform, particularly the pension plan within the solidarity program.
The reform to the CSS is progressing slowly, with reserves that will only cover two months in 2025 and a projected deficit of $900 million. The Legislative Assembly granted a one-month extension for the project to be discussed. To date, only minor adjustments have been discussed, without addressing structural solutions or communicating the cost of the current status.
The confrontation between Martinelli and Mulino complicates national politics—and the approval of reforms—with the former president pressuring the current president to resolve his legal issues in exchange for crucial votes in the Assembly. Martinelli seeks to apply the principle of specialty to annul trials, but the Supreme Court of Justice has rejected his intentions for now.
First Quantum is seeking to reopen the copper mine that was closed in 2023 but faces opposition from environmental groups. Its attempt to involve Trump could unnecessarily complicate the negotiation with the government.
Trump has threatened to take action if the Panama Canal tolls are not reduced, although his argument does not affect the legal and operational status of the Canal. His threats to Chinese investments in Panama could jeopardize two key projects: the fourth bridge over the Canal and the Panama-Chiriquí Train. Additionally, the implementation of his electoral promises, such as increasing tariffs in China, could negatively impact Panama's economy.
Our forecasts of 3.0% growth for 2024 and a 6% SPNF deficit remain unchanged.
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